17455: FYI WPP Q1 WTF (Cont’d).

 

MediaPost spotlighted additional details on WPP Q1 earnings, revealing WPP Media delivered the worst decline for the single White operating company.

 

This is extra bad news given pseudo thought leaders and analysts speculate WPP CEO Cindy Rose is restructuring the flaming dumpster to become a media-first enterprise.

 

Based on the earnings report, WPP is now a media-worst enterprise.  

 

WPP Media Delivers Worst Q1 Decline, ‘Enterprise Solutions’ Seen Most Promising

 

By Joe Mandese

 

Media was the biggest drag on revenue during WPP’s first quarter, the “unholding” company disclosed in its earnings release this morning.

 

WPP Media, which accounts for the greatest share of company revenue (41%, see chart below), saw its revenue decline 8.5% in the first quarter -- nearly two points greater than WPP’s overall decline and markedly greater than its other reported divisions, including creative services, public relations and specialist agencies.

 

While WPP did not disclose the explicit performance of a newer category of services – “enterprise solutions,” which now accounts for 13% of total revenue -- it was cited as a potential area of higher revenue growth.

 

The earnings report called out a recent enterprise solutions deal with Adobe as an example, but did not explicitly disclose the nature of the services or the revenue model.

 

17454: FYI WPP Q1 WTF.

 

MediaPost spotlighted the WPP Q1 earnings call, where the White holding company—er, single White operating company—reported revenue declines in line with expectations.

 

Clearly, expectations are low—albeit probably realistic.

 

WPP CEO Cindy Rose dodged the call, contrasting the attendance practice established by predecessors Mark Read and Sir Martin Sorrell.

 

MediaPost stated, “Rose will participate in the mid- and full-year earning calls, following the practice of most other UK and European public companies.”

 

Okay, except WPP is unlike most other UK and European public companies, at least in terms of experiencing dire financial straits. One would think Rose might feel obligated to appear at every earnings call to provide status reports on Eviscerate28.

 

Sadly, no one seems concerned about employees’ expectations.

 

WPP Reports Q1 Dip, In Line With Expectations

 

By Steve McClellan

 

WPP reported first quarter net revenues of 2.26 billion GBP ($3.05 billion), down 6.7% on an organic basis (excluding currency and M&A impact), in line with previous guidance from the company.  

 

The firm reiterated that it expects a first half organic revenue decline in the mid-to-high single digits for the first half of 2026 “with an improving trajectory in the second half.” The firm also stated that full-year pre-tax profit margin is expected to be in the 12% to 13% range.  

 

CEO Cindy Rose stated that the company’s latest turnaround plan unveiled in February  is “resonating with clients and driving strong new business. While it is only a few months since we unveiled our Elevate28 strategy, I am encouraged by this momentum which validates the ‘Stabilization’ phase of the plan and our path to growth.” 

 

Rose was not on the company’s earnings call, which is a departure from past practice during both the Mark Read and Martin Sorrell eras. It’s understood going forward that Rose will participate in the mid- and full-year earning calls, following the practice of most other UK and European public companies.  

 

Major first quarter wins included being named Estée Lauder’s first-ever global media partner, and media assignment wins for Wendy’s, SC Johnson and Norwegian Cruise Lines in the US. 

 

“Elevate28” is designed to stabilize the business this year, build momentum in 2027 and deliver sustained growth from 2028 and beyond.  

 

The company said it would cut costs by 500 million GBP a year to help achieve the plan. That cost saving is expected to be fully achieved by 2028. 

 

By business segment revenue, global integrated agencies were collectively down 7.4%, which the company attributed largely to prior year client losses. There was a sequential improvement from the 10%+ dip seen in Q4. PR was down 2.6% and specialist agencies were down 2.3%. 

 

By region, North America declined 7.8% due largely to prior year client losses at WPP Media and spending cuts at Ogilvy and AKQA.  

 

The UK declined 6.6%, Western Continental Europe saw a 4.7% shortfall, and the rest of the world combined was off 6.9%, driven by Asia Pacific (-8.2%). India grew 1.0% on new business wins, offset by China declines (-12.2%) on continued spending pressures and client losses. Middle East & Africa declined 11.1% on cuts to client spending caused by geopolitical strife in the Middle East.  

 

Latin America was down 3.4% and Central & Eastern Europe declined less than 1%.

17419: Sorrell Subscribes To Payment Scheme.

 

Digiday reported S4 Capital CEO Sir Martin Sorrell is seeking to move clients from billable hours to subscriptions.

 

In recent years, White holding companies and White advertising agencies have been generating the most creative work in accounting departments, finding innovative ways to cook the books.

 

So, it’s no surprise Sorrell—who has always been a financial schemer—would pioneer in payment ploys.

 

Being a pioneer, however, has not yet made Sorrell a profiteer. He might soon concede to work for peanuts.

 

“It’s about change management”: Sir Martin Sorrell says the billable hour is dying, but getting clients to move in is proving harder

 

By Seb Joseph

 

Yes, outcome-based pay is en vogue. But none of it matters if agencies aren’t using AI at the scale the economics require. And that only happens if clients are willing to pay for it. Most aren’t.

 

S4 Capital CEO Sir Martin Sorrell said as much on his marketing group’s latest earnings call yesterday — a cold dose of realism about the hype that comes after the billable hour. For S4, the answer is subscriptions: fixed annual fees bundling senior talent with agentic workflows, brand-specific knowledge bases and quarterly software-style upgrades. 

 

Sceptics call it the agency retainer rebranded. Believers see it as an on-ramp to a world beyond the billable hour. The truth is probably somewhere in between — at least for now. The reasons are outlined [elsewhere], but Sorrell’s own framing cuts to it. 

“The far more important thing is, what is going to be the pace of AI adoption?,” he told analysts on the call. “Because the simple fact is, consumers have adopted AI faster than companies, and companies aren’t doing it because it’s not just about technology or workflow — it’s about change management. And companies find it difficult to do that.”

 

The ones that do are buying into subscriptions. One enterprise client signed up last year and restructured its entire agency relationship around the model. Three more are in discussions with more expected to follow since subscriptions are now baked into every new business pitch S4 runs. By year-end, it wants a quarter of its revenue running that way.

 

Getting there is another matter. For subscriptions to work at scale, a lot has to align: existing clients have to be willing to reopen contracts; procurement teams have to get comfortable pricing outputs rather than hours; rising inference costs have to stay absorbable within a fixed fee; and the pace of AI adoption across the broader market has to quicken. None of those things are moving as fast as S4 would like.

 

“I don’t think anybody in marketing procurement teams is against a change,” said Wes ter Haar, co-founder of Media.Monks and executive director at S4Capital on the call. “Everybody understands that the traditional model really isn’t sustainable in any meaningful way, but doing this at scale in a running business is not the easiest thing to do.”

 

There are, however, pockets of momentum. Chiefly, in automotive and financial services — sectors pushed by existential threat rather than enthusiasm. Chinese EV competition in one case, fintech disruption in the other. FMCG, arguably the most valuable category for marketing groups, is starting to stir too. And counterintuitively, the conflict in the Middle East could accelerate things further: if its reverberations push inflation higher and keep rates elevated, that macro pressure may yet do what enthusiasm alone hasn’t: force the kind of AI adoption at scale that makes the new model viable.

 

“It may be that that acts as a catalyst,” Sorrell said on the call. “If global growth slows, inflation rises and interest rates are stickier — which seems to be the scenario already being built in by some of the analysts and the investment banking firms — that might be the engine for increased tech adoption and AI adoption.”

 

Should that happen, it might finally give the agency model’s critics pause. So far, nothing has — not the workforce automation, the M&A, nor the push into agentic services.

 

Or as as Gartner vp analyst Jay Wilson, put it: “More advanced client-side organizations are starting to pivot to enterprise-wide platforms from the hyperscalers — and the agency AI platforms, which are basically just connectors of Salesforce and Adobe and Workfront, we don’t believe are going to be as relevant going forward.”

 

Which is why the subscription model’s internal economics matter as much as its commercial logic. The pitch to clients is simple: as AI improves, they get more for the same price. Fifty assets a month becomes seventy, no fee increase. But that only works if S4 can keep absorbing rising compute costs inside the fixed fee. With video models and always-on usage expanding fast, pass-through costs may eventually be unavoidable. That would mean variable pricing — the one thing procurement teams are least equipped to sign off on.

 

“On personalization at scale, I would say there’s more opportunity,” said Sorrell. “But on visualization and copywriting, we’re seeing compression — if you charge on time, that is compressed.”

 

As it stands, it’s the latter two where most AI work done at scale is happening. CMOs, despite what they say, see AI more as an efficiency play than an effectiveness one — technology to get things done faster and cheaper, not necessarily better. AI only compounds for a marketing services company like S4 if it can do all three. Without the effectiveness part — the bit where real outcomes can be pegged to results — the agency model becomes an even slipperier slope to commoditization.

 

How S4 got to this point is a sobering illustration. The group reported revenue of £754.8m for 2025, down 11% on a year earlier, with net revenue falling 10.8% to £673m. Nearly half that revenue historically came from big tech — but marketing spend at Amazon, Meta and Alphabet has been essentially flat since 2022, while their AI infrastructure spending has grown over 133%.

 

Tech clients spending more on AI and less on agencies: that’s the burning platform behind S4’s model shift, and the reason subscriptions are no longer just a commercial experiment.

17411: On WPP CEO Cindy Rose Raise, Raising, And Reaching.

 

The Times reported WPP CEO Cindy Rose could collect a maximum payout of £14.2 million (roughly $19.1 million USD) if she manages to raise the White holding company’s share price by 50 percent.

 

If successful, Rose would earn more than her predecessor, Mark Read, whose 2024 salary was capped at £8.6 million.

 

It might sound like progress given the gender pay gap issues prevalent at WPP (and Adland overall). However, there are at least two critical points to consider:

 

1. Read took multiple pay cuts in recent years resulting from his failure to even slow WPP’s financial free fall.

 

2. The £14.2 million Rose deal is still dwarfed by former WPP Overlord Sir Martin Sorrell, who once pocketed almost £30 million.

 

In comparison, Omnicom Chairman and CEO John Wren received $21.67 million in 2024; Publicis Groupe CEO Arthur Sadoun has a base salary of roughly $1.25 million with perks and bonuses that could bump total compensation to over $10.7 million; Havas CEO Yannick Bolloré reportedly received roughly $11.4 million in 2024; Former Dentsu CEO Hiroshi Igarashi could’ve received a package exceeding $14 million (no word yet on new CEO Takeshi Sano); Stagwell CEO Mark Penn received $8.4 million in 2023. In short, holding company CEO salaries are all over the global map—and obscenely high.

 

Keep in mind too that WPP has been on a death spiral since at least 2018, making the goal of boosting the current share price by 50 percent downright delusional.

 

In the end, Rose will probably raise a White flag vs raising the share price.

 

WPP boss Cindy Rose could make £14.2m if she gets things right

 

The payout for her predecessor, Mark Read, was capped at £8.6 million for 2024, but she will only get the maximum amount if the shares rise by 50%

 

By Isabella Fish, Retail Editor

 

The new chief executive of WPP is in line for a significantly higher pay reward than her predecessor after the advertising group overhauled its remuneration structure to align UK packages with those in the US. 

 

Cindy Rose could receive a maximum payout of £14.2 million if she lifts the company’s share price by 50 per cent, under a newly proposed remuneration policy set out in the annual report. 

 

By comparison, the maximum potential payout for her predecessor, Mark Read, was £8.6 million for 2024. 

 

The advertising company said it was overhauling its pay structure to address what it described as a “disparity in incentive arrangements” between employees based in the UK and those in the US. In 2023 and 2024, total compensation for about a third of its US-based executive committee members exceeded that of the group chief executive under the previous framework, it said.

 

WPP said it “believes it is appropriate to narrow this disparity and alleviate some of the challenges of pay compression, creating a fair and sustainable framework across the global executive team”.

 

British companies have warned of a transatlantic pay gap and restrictive UK corporate governance frameworks. Unilever, the consumer goods giant, recently said it had missed out on high-calibre American candidates whose existing compensation packages far exceeded what the group could offer under its current structure. 

 

Rose, 60, is an American-British dual national who splits her time between the UK and the US. The former Microsoft executive, who took over at WPP in September, was appointed on a base salary of £1.25 million, with additional incentives paid in cash and shares depending on performance. 

 

Under the proposed policy, her maximum payout includes £5.9 million in bonuses and stock awards to compensate for those she forfeited by leaving Microsoft, as well as salary, benefits, pension, maximum annual bonus, and the combined value of long-term share awards, including a new restricted share plan.

 

The company is hoping to introduce a restricted share award worth 100 per cent of salary for the chief executive and chief financial officer, alongside existing long-term incentive plans. These awards would run over five years, with a three-year vesting period followed by a two-year holding period, and would be subject to performance conditions.

 

A 50 per cent share price increase might seem like a steep target for Rose to hit, but the stock is currently at a particularly low point. The group was ejected from the FTSE 100 in December after its shares fell to a near 30-year low. The stock is down 75 per cent over the past five years and about 63 per cent over the past 12 months.

 

Rose is seeking to stabilise the business through cost savings and having a simpler structure following a series of client losses and a downturn in advertising spending.

 

In February, she set out a plan aimed at cutting £500 million in costs, including removing duplication and combining human resources and back-office functions across parts of the group.

 

According to the company’s latest report, WPP employed 98,655 workers at the end of last year, 6,500 fewer than the year before. WPP declined to comment.

17404: On Pioneering & Profiteering.

 

A previous post noted Omnicom Chairman and CEO John Wren’s honorary title is changing from Pioneer of Diversity to Pioneer of Divestiture.

 

The label switch underscores the devolution of Adland and warrants consideration, criticism, and commentary.

 

For starters, Pioneer of Diversity was always a farce representing performative posturing, pseudo philanthropic propaganda, and heat shields of the past.

 

Pioneer of Divestiture symbolizes a different direction.

 

While Pioneer of Diversity feigned interest in people, Pioneer of Divestiture focuses on profit.

 

Pioneer of Divestiture priorities descend in the following order: 1) shareholders who must see quarterly reports; 2) clients who must see quarterly sales, while providing revenue, and; 3) workforce who must see to delivering products with cost-effective efficiency and/or be replaced by AI.

 

In summation, Pioneer of Divestiture is trailblazing toward Adland Armageddon.

17387: WPP = Wrong Payment Plans.

Digiday reported WPP is exploring outcome-based pay schemes, charging escalating fees for measurable results.

 

This is hardly a new idea, as White advertising agencies have unsuccessfully attempted such deals for decades.

 

Although in an industry where White holding companies have created commoditization—catering and capitulating to client whims—it would be difficult to discern who is responsible for improved performance.

 

Given WPP’s desperation for billable business—paired with its growing AI fascination—perhaps a low-cost strategy is more realistic.

 

WPP is not suited to propose outcome-based pay; but rather, outhouse-based pay.

 

WPP is betting its future on getting paid for outcomes

 

By Seb Joseph

 

For decades, the agency business has run on a simple, if imperfect logic: clients pay for time and the people who fill it. Hours logged, heads counted, invoices sent. Nobody particularly loved it but it was predictable enough that nobody moved to change it.

 

That may finally be shifting. At the presentation for its new strategy in London on Thursday (Feb. 26), WPP made the most explicitly public case that the future of agency compensation look less like a staffing invoice and more like a performance contract — one where fees are tied directly to business results, not inputs.

 

“Those outcomes aren’t ‘do you like the agency you work with’,” said Johnny Hornby, CEO, WPP specialist communications agency division. “Those outcomes are ‘are we selling more product and will we get paid on being able to sell more product?’”

 

That’s a notable thing for a senior ad exec to say in public. It’s even more notable that there’s a real client sitting behind it.

 

Not a concept, a contract

 

Jaguar Land Rover is the clearest proof point WPP has right now. The group is currently in an exclusive negotiation with the automaker to become its global creative and marketing partner, with full contracting expected by March. The commercial structure Hornby described — fees tied to measurable sales and brand performance rather than hours worked — is the model WPP is actively pushing in pitches. CEO Cindy Rose was direct about what she thinks it signals: “I believe this is the beginning of a more widespread commercial model evolution.”

 

Whether that’s CEO optimism or genuine market shift, it’s worth taking seriously. The conditions that have made outcome-based pay feel impossible for so long are changing.  AI is compressing the cost of content production dramatically. A thousand ad variants now cost easily what five used to. That blows up the logic of charging by the unit. At the same time, measurement technology has advanced to the point where agencies can, with increasing credibility, draw a line between their work and actual sales.

 

“By shifting our revenue profile from being unpredictable and episodic to being much higher quality, recurring revenue that can be linked directly to the outcomes we deliver for our clients,” Rose said. “A commercial model that is more closely linked to client outcomes will enable us, over time, to move away from time and materials.”

 

WPP’s data platform, built partly around InfoSum’s federated technology, is central to the pitch. The company claims it can now connect first-party data, media signals and sales outcomes in a single closed loop, without data leaving a client’s environment.

 

For Heineken, that meant linking shopper data with TV broadcaster ITV’s viewing audiences and supermarket Tesco’s sales figures to measure real in-store uplift. For a U.S. retailer, rebalancing marketing investment through WPP’s platform reportedly generated £300 million in incremental sales. Results like these are ones the group is trying to wrap a performance fee around.

 

Three models, not one

 

The transition isn’t a clean flip. CFO Joannne Wilson laid out three commercial tracks WPP is running simultaneously: output-based pricing, which is growing but still a minority of work; and technology licensing fees including subscriptions and platform bundles. As Wilson explained: “With many of our clients, we’re working to understand what works best.”

 

Outcome-based elements have always existed in agency contracts as small bonus kickers. What WPP is describing is more structure — making performance the organizing principle of the relationship, not an addendum to it. Get it right, and the commercial benefits cut both ways. Clients get a partner whose fees are tied to actual business results, not hours spent. WPP, in theory, gets paid for the value it creates rather than the cost of creating it — a distinction that matters more as AI drives production costs down.

 

“We’re looking at this to be ultimately over time margin enhancing for us,” said Wilson, though she framed it as a consequence of delivering more value, versus cutting corners on delivery. 

 

The internal bet

 

The holdco is wiring its own organization the same way. Global client leaders — the senior execs responsible for the biggest accounts — will now be paid on client growth, full stop. Not agency P&L, not holdco EBIDTA. Client growth.

 

“If you’re a GCL, you’re paid on your client growth. It’s that simple,” Rose said. “And it’s dramatically from where we are today, where if you’re an agency you’re paid on your agency results.”

 

The logic is that when WPP’s own people are on a version of performance pay they become better at making the case for it with clients.

 

The questions that remain

 

There are obvious gaps. What happens when targets are missed? How are outcomes independently verified? What share of WPP’s revenue currently sits under any outcome-linked structure? None of those numbers were shared during the update, and analysts repeatedly pushed on the lack of specifics.

 

Which is why the JLR contract, should it get ratified, will be so important. If WPP can demonstrate over the next year that the model works it will have something genuinely new to sell. If, on the other hand, it turns out to be a one-off, the outcome-based narrative risks becoming another piece of holdco lore.

 

Why that’s less likely to happen this time is due to the underlying infrastructure being more credible. The measurement tools exist while AI has already broke the per-unit pricing logic. And clients, under their own pressure to prove marketing returns, increasingly want a partner whose incentives match theirs.

 

The old model is running out of road. Whether WPP has found the new one is still an open question.

17249: Retorting & Reporting.

 

Adweek spotlighted griping from Publicis Groupe CEO Arthur Sadoun, who publicly pressured Omnicom to report its financials like the other holding companies (Omnicom currently reports gross revenue while rivals report net revenue). Oddly enough, Sadoun said if Omnicom does not change its reporting, Publicis Groupe will proceed to mimic the soon-to-be-biggest White holding company and report gross revenues too.

 

Don’t expect Sadoun’s suggestion to get placed on Omnicom CEO John Wren’s to-do list—alongside maintaining his Pioneer of Diversity status.

 

It all sounds like sour grapes between ex-lovers…?

 

Arthur Sadoun Urges Omnicom to Report Financials Like The Other Big Four Holdcos 

 

Publicis Groupe CEO criticizes ‘apples and oranges’ accounting ahead of Omnicom’s IPG takeover

 

By Rebecca Stewart

 

Arthur Sadoun is putting public pressure on competitor Omnicom to report its financials the same way the other Big Four holding companies do.

 

Ahead of Omnicom’s takeover of Interpublic Group (IPG), set to close this month, Sadoun called for the U.S.-based ad network to report net revenue, rather than gross revenue, in its financial updates. 

 

Sadoun said Omnicom’s current approach makes it “impossible” to compare its performance at a market level: “When Omnicom becomes the largest player, apples and oranges accounting has to end, to increase investor trust in the industry,” he said in a speech during Morgan Stanley’s European Tech, Media, and Telecom (TMT) conference in Barcelona on Nov. 12.

 

“What wasn’t a problem when they were a distant third will become one now. Investors and shareholders need transparent, comparable performance metrics across the industry,” he added. 

 

The Publicis Groupe CEO urged Omnicom to report net revenue, as WPP, Dentsu, Havas, Publicis, and IPG, which will soon represent 40% of the “new Omnicom,” all do. 

 

Sadoun stated that if Omnicom doesn’t bring its accounting in line with its peers, Publicis will start reporting both gross and net indicators for “a couple of quarters” before moving fully to gross.

 

When approached by ADWEEK, Omnicom declined to comment.

 

What does it mean?

 

Based on 2023 figures, the combined Omnicom-IPG would generate approximately $25.6 billion in gross revenue, making it the largest of the “Big Four” ad networks.

 

Currently, Omnicom reports gross revenue, which includes client billings and pass-through costs. Its peers, meanwhile, publish net revenue figures, which exclude these costs to show only what the agencies actually earn for their services.

 

Sadoun believes Omnicom should measure its performance on the same basis as its competitors to give a clearer picture of how its IPG acquisition is performing. 

 

Brian Wieser, founder of strategic advisory and consulting firm Madison and Wall, told ADWEEK he would be surprised if Omnicom changed its financial reporting following pressure from Sadoun.

 

However, he agreed that Omnicom’s preferred way of reporting is “misleading” and makes any comparison between industry figures “untrustworthy.”

 

Wieser said the reporting discrepancy also comes at a cost. “When companies don’t report in a clear way, they make it harder for analysts to understand them, and when they become too hard to understand, investors and analysts will spend less time looking at them, resulting in a reduction of interest in the sector. That means there’s less capital going into these companies.”

 

In Q3 2025, Omnicom reported gross revenue of $4 billion. 

 

Publicis reported a 3.1% increase in net revenue, reaching $3.9 billion in the same quarter, while WPP posted an 11.1% decline in revenue, less pass-through costs. IPG’s total revenue before billable expenses was $2.14 billion in Q3.

17247: IPG 3Q $$$ OMG SMH WTF.

 

According to Adweek, IPG reported 3Q 2025 earnings after the market closed yesterday, showing global revenues dropping 5% year over year.

 

So, as the Omnicom acquisition of IPG proceeds, expect more pruning and layoffs due to decreased revenue and increased redundancies.

 

In the weeks ahead, the most creative work from Omnicom and IPG will be generated by accountants.

 

IPG Revenues Drop in Last Earnings Report as a Public Company 

 

The holding company forwent a call with investors ahead of its acquisition by Omnicom, expected to close this month

 

By Alison Weissbrot

 

IPG reported third quarter 2025 earnings after the market closed on Tuesday evening, with global revenues dropping 5% year over year. 

 

The holding company released a 10-Q filing and did not host a call with investors due to its soon-to-close acquisition by Omnicom Group.

 

The Numbers

 

$2.5 billion – Global revenue including billable expenses, a roughly 5% drop year-over-year

 

$1.61 billion – Total revenues generated in the U.S., down 5.4% year-over-year 

 

$1.37 billion – Cost of salaries and related expenses, down 6.4% year-over-year

 

$219 million – Operating income, up 65% year-over-year

 

​​18.5% – Adjusted EBITDA margin before billable expenses, restructuring, and deal costs

 

0.344 – The number of Omnicom shares that stockholders will receive per each of their IPG shares, or cash if applicable, after the acquisition closes

 

Key quote

 

“Following the close of the transaction, Omnicom shareholders will own 60.6% of the combined company and IPG shareholders will own 39.4%, on a fully diluted basis,” the company wrote in its 10-Q filing. “As a result of the merger, we will cease to be a publicly traded company.”